The day after AMD announced their quarterly results, Intel followed up with a very impressive quarter of their own. Intel has reported another record quarter with $17B in revenue and $5B net. The business is extremely healthy and they continue to provide a lot of value and returns to shareholders. Typically Q2 is the second slowest quarter of the year, but Intel was able to improve their revenues by $900M over Q1. In certain quarters a 5% increase may not be all that large, but it is a significant jump from Q1 to Q2.

Intel reported that nearly all areas of the company have grown. Client Computing Group showed a 6% increase year over year, which is good news for the industry in general as many have (often) predicted that the PC market is in decline. This is also in the face of renewed competition from AMD and their Zen architecture based products. AMD also has grown steadily over the past year in terms of shipping products, so that further reinforces the impression that the PC market continues to grow steadily.

The data-centric business is steadily closing the gap between it and the PC centric group. CCG posted $8.7B in revenues while the data groups combined came in at around $8.1B. The Data Center Group was $5.5B of that result. It is up a very impressive 27% yoy. Intel has what seems to be a juggernaut in the data center with their Xeon products, and that growth is quite likely to continue growing as the need for data processing in our information rich world seemingly knows no bounds.

Intel raised their outlook for the year by nearly $2B to an impressive $69B in revenues. This is easily 10x that of their primary competitor. 2018 has certainly been a very profitable year for Intel and it looks to continue that trend throughout the last two quarters. Intel continues to improve upon their 14nm processes and it has allowed them to achieve a 61.4% margin. Compare this to AMD’s 37% margin and we can understand why 2018 is looking so good. Intel has lost a little bit on margin as compared to last year, but the amount of products being shipped is simply stunning as compared to its rival.

There were some expecting AMD to be taking up more of Intel’s marketshare, but that has not been the case. If anything, while AMD’s bottom line has improved, Intel appears to have actually taken more share in an expanding market. Unlike 2003 when AMD had the superior product with the Athlon 64 over Intel’s Pentium 4, the current Ryzen CPUs are “merely” competitive. While the performance and efficiency jump for AMD’s architecture is impressive considering the previous “Bulldozer” based generation, they now offer comparable performance with a price/core count advantage over Intel. This has not been enough to convince people and organizations to change en masse to AMD’s offerings. In 2003 a 2 GHz Athlon 64 was outperforming a 3.2 GHz Pentium 4. AMD was able to continue outperforming Intel even though they were at a serious process disadvantage.

While Q3 and Q4 look to continue Intel’s string of record quarters, things do not look as rosy when we get into 2019. Intel has had an endless stream of problems getting their advanced 10nm process up and running. It was originally expected to replace Intel’s 14nm process around two years after that particular process had been introduced. Then it turned into three years. Now we are five years into Intel using a 14nm variant for their latest generation of products. Intel used to have a 18 to 24 month lead over the competition when it comes to process technology, but now that advantage has all but evaporated. In theory Intel’s 10nm process is superior to what TSMC is offering with its 7nm in terms of die size, power, and transistor performance. However, those advantages do not amount to anything if it is unworkable. Intel has been very tight lipped with analysts and shareholders about the exact issues it is facing with the direction they set on with 10nm. It seems the combination of materials, tolerances, and self-aligned quad patterning is problematic enough that Intel cannot get consistent results with yields and bins.

In the conference call Intel said that 10nm parts will be available on shelves by the holiday season of 2019. This means that Intel expects to hit high volume manufacturing near the end of 1H 2019. Intel further stated that data center parts will be shipping shortly after desktop and mobile, so most expect the first products to hit in Q1 2020. The problem that Intel will is that TSMC will be starting volume manufacturing of their 7nm parts shortly, if not already. AMD has 7nm EPYC sampling to partners and has spoken of a 1H introduction of those parts in volume. AMD will be introducing the Zen 2 architecture in that time on both server and desktop, and they are hinting at a significant IPC uplift with these parts.

If Intel is able to hit its 10nm goal in late 2019, AMD will have around a nine month window where they theoretically could have a superior product than Intel. AMD will surely come ahead from a density standpoint. If we combine this with the potential IPC improvement and a small uplift in transistor performance, then Zen 2 products should be able to outclass anything Intel comes out with. If AMD is really on the ball, then their EPYC processors could have a year to themselves without a comparable product from Intel.

This type of competition does not mean that Intel will simply shrivel up and die, but it is causing investors to rethink holding onto the stock after the pretty impressive run up over the past several years. Intel still has more fab space available to it than AMD could dream of at this point. There will be a lot of competition for 7nm wafer starts that will be shared by AMD, NVIDIA, Qualcomm, and Apple (not to mention dozens of other fab-less semi firms). AMD could very well sell as many chips as it can make, but it simply cannot address the needs of all of the markets that it is competing in. If GLOBALFOUNDRIES 7nm process is similar to TSMC’s, then we will see AMD be able to supply far greater amounts of product to the market, but GF is at least six months behind TSMC when it comes to ramping up their next generation process line. I would not expect GF based CPUs to hit anytime before Q2 2019, if not towards the end of that quarter.

Does this mean that Intel expects nothing except doom and gloom throughout 2019 and possibly into 2020? I do not think so. Intel will retain its market dominance, but it looks to be experiencing a situation that is a combination of a competitor hitting its stride as well as some bad luck/poor planning with manufacturing. This should open the door for AMD to make significant advances in marketshare and allow the company to make some serious money by improving their ASPs as well as shipping more parts.

2018 will undoubtedly be a record year for Intel. It is 2019 that is giving pause to investors and shareholders. If Intel can clean up its 10nm process in a timely manner they will close the door on any advances from AMD. If the company continues to experience issues with 10nm and never in fact gets it out the door, then it will be a long couple of years til Intel gets out their 7nm process. The rumor is that engineers have been pulled off of 7nm to fix 10nm. If this is the case, then I hesitate to even think when we will be seeing that upcoming node coming to fruition.

Today AMD announced their latest financial results for Q1 2018. We expected it to be a good quarter with their guidance earlier this year, but I doubt many thought it would be as strong as it turned out to be. AMD posted revenue of $1.65 billion with a net income of $81 million. This is up from the expected $1.57 billion that analysts expected from what is typically a slow quarter. This is up 40% from Q1 2017 and its $1.18 billion and up 23% from Q4 2017.

There are multiple reasons behind this revenue growth. The compute and graphics segment lead the way with $1.12B of revenue. The entire year of 2017 AMD had released parts seemingly nonstop since March and the introduction of Ryzen. Q1 continued this trend with the release of the first Ryzen APUs with Vega Graphics introducing the 2000 series. AMD also ramped up production of the newly released Zen+ Ryzen chips and started shipping those out to retailers and partners alike. Initial mobile Ryzen parts were also introduced and shipped with SKUs being also shipped to partners who have yet to announce and release products based on these chips. Finally the strength of the Radeon graphics chips in both gaming and blockchain applications allowed them a tremendous amount of sellthrough throughout 2017 and into 2018. AMD estimates that 10% of the quarter was due to blockchain demand.

Enterprise, Embedded, and Semi-Custom had a revenue of $532 million, which is lower than most analysts expected. Semi-Custom in particular has seen a decline over the past few quarters with the release and saturation of the market of the latest console platforms utilizing AMD designed chips. It appears as though much of the contract is front loaded in terms of revenue with royalties tapering off over time as sales decrease. AMD did have some significant wins, namely providing Intel with Vega based GPUs to be integrated with Intel’s Kaby Lake-G based units. These declines were offset by the shipment of EPYC based processors that are slowly ramping and being shipped to partners to be integrated into server platforms later this year. We have seen a handful of wins from companies like Dell EMC, but AMD is still slowly re-entering the market that they were forced to abandon with their previous, outdated Opteron products. AMD expects to reach mid-single digit marketshare during 2019, but for now they are just getting off the ground with this platform.

The company is not standing still or resting on their laurels after the successful and heralded launch of the latest Ryzen 2000 series chips based on the Zen+ architecture. It is aggressively ramping their mobile chips featuring the Zen/Vega combination and have some 25 product wins being released throughout late spring and summer. Overall partners have some 60 products either shipping or will ship later this year featuring Ryzen based CPUs.

There is some fear that AMD will see its GPU sales throughput be impacted by the recent drop of cryptocurrency value. Several years back with the Bitcoin crash we saw a tremendous amount of secondhand product being sold and GPU revenues for the company tanked. AMD is a bit more optimistic about the upcoming quarter as they expect the current cryptocurrency/blockchain market is much more robust and people will be holding onto these cards to mine other products/workloads rather than drop them on eBay. My thought here is that we will see a rise in cards available on the secondary/used market, but quite a bit might be offset by latent gaming demand that has been held back due the outrageous prices of GPUs over the past year. People that have been waiting for prices to get back to MSRP or below will then buy. This could be further enhanced if memory prices start to drop, providing more affordable DDR4 and flash for SSDs.

The company is also forging ahead with advanced process technology. They have recently received silicon back from TSMC’s 7nm process and it looks to be a Vega based product. The rumor surrounding this is that it will be more of a compute platform initially rather than gaming oriented. Later this year AMD expects to receive new EPYC silicon, but it looks as though this will be from GLOBALFOUNDRIES 7nm process. AMD wants to be flexible in terms of manufacturing, but they have a long history with GLOBALFOUNDRIES when it comes to CPU production. The two companies work closely together to make sure the process and CPU design match up as cleanly as possible to allow products such as Zen to reach market successfully. The GPU arm is obviously more flexible here as they have a history with multiple foundry partners throughout the past two decades.

AMD has set an aggressive, but achievable, timetable of product releases that is initially focusing on the CPU side but would logically be transitioning to the GPU side. Zen+ is out on time and has met with acclaim from consumers and reviewers alike. The latest GPU products are comparable in performance to what NVIDIA has to offer, though they are less power efficient for that level of performance. The “pipecleaner” Vega on 7nm will pave the way towards Navi based products that look to be introduced next year. AMD could possibly refresh Vega on 12nm, but so far there has been no concrete information that such a product exists. They may very well continue to rely on current Polaris and Vega products throughout the rest of this year while focusing on Navi efforts to have a more competitive part come 2019.

Q2 2018 looks to be another successful quarter for AMD. The company’s outlook calls for revenue in the $1.725 billion range, plus or minus $50 million. AMD expects continued growth in all Ryzen product lines and greater throughput of EPYC based products as companies test and release products based on that platform. The GPU market could remain flat, but will most likely decline. That decline will be more than covered by the sell-through of the Ryzen line from top to bottom.

AMD improved their margin by an impressive 4%. Going from 32% to 36% showed the strength and higher ASPs of both CPU and GPU products. AMD expects another 1% increase over the next quarter. While these are good numbers for AMD, they do not match the 58%+ for NVIDIA and Intel when it comes to their margins. AMD certainly has a lot of room for improvement, and a richer product stack will allow them to achieve greater ASPs and see a rise in their overall margins. If EPYC becomes more successful, then we could see another significant improvement in margins for the company.

AMD is getting back to where they belong in terms of product placement, competitiveness, and financial performance. The company has seen a huge improvement year on year and hopes to continue that with a rich product stack that addresses multiple areas of computing. AI and machine learning is ramping up in the company in terms of software support as they feel their CPUs and GPUs are already good enough to handle the workloads. As more money comes in, they can afford to diversify and create a wider product base to compete in more markets. So far Lisa Su has been very, very successful in helping pull AMD from the ashes to the competitive situation that they currently find themselves in.

The big question that has been going through the minds of many is how much marketshare did AMD take back and how would that affect the bottom line? We know the second half of that question, but it is still up in the air how much AMD has taken from Intel. We know that they have, primarily due to the amount of money that AMD has made. Now we just need to find out how much.

Q2 revenue surpassed the expectations of both the Street and what AMD had predicted. It was not a mind-blowing quarter, but it was a solid one for what has been a slowly sinking AMD. The Q2 quarter is of course very important for AMD as it is the first full quarter of revenue from Ryzen parts as well as the introduction of the refreshed RX 500 series of GPUs.

The Ryzen R7 and R5 parts have been well received by press and consumers alike. While it is not a completely overwhelming product in every aspect as compared to Intel’s product stack, it does introduce an incredibly strong dollar/thread value proposition. Consumers can purchase an 8 core/16 thread part with competitive clock speeds and performance for around $300 US. That same price point from Intel will give a user better single threaded and gaming performance, but comes short at 4 cores/8 threads.

The latest RX series of GPUs are slightly faster refreshes of the previous RX 400 series of cards and exist in the same price range of those previous cards. These have been popular with AMD enthusiasts as they deliver solid performance for the price. They are also quite popular with the coin miners due to the outstanding hash rate that they offer at their respective price points as compared to NVIDIA GPUs.

AMD ended up reporting GAAP revenue of $1.22B with a net income of -$16M. Non-GAAP net income came in at a positive $19M. This is a significant boost from Q1 figures which included a revenue of $984M and a net income of -$73M. The tail end of Q1 did include some Ryzen sales, but not nearly enough to offset the losses that they accumulated. These beat out the Street numbers by quite a bit, hence the uptick in AMD’s share price after hours.

The server/semi-custom group did well, but is still down some 5% as compared to last year. This is primarily due to seasonal weaknesses with the consoles. Microsoft will be ramping up production of their Xbox One X and AMD will start to receive royalties from that production later this year. AMD has seen its marketshare in the data and server market tumble from years past to where it is at 1% and below. AMD expects to change this trend with EPYC and has recorded the initial revenue from EPYC datacenter processor shipments.

We cannot emphasize enough how much the CPU/GPU group has grown over the past year. Revenue from that group has increased by 51% since last year. We do need to temper that with the reality that at that time AMD had not released the new RX series of GPUs nor did they have Ryzen. Instead, it was all R5/R7 3x0 and Fury products as well as the FX CPUs based on Piledriver and Excavator cores. It would honestly be hard for things to get worse than that point of time Still, a 51% improvement with Ryzen and the RX 5x0 series of chips is greater than anyone really expected. We must also consider that Q2 is still one of the slowest quarters in a year.

AMD expects next quarter to grow well beyond expectations. The company is estimating that revenue will grow by 23%, plus or minus 3%. If this holds true, AMD will be looking at a $1.5B quarter. Something that has not been seen for some time (especially post foundry split). The product stack that they will continue to introduce is quite impressive. AMD will continue with the Ryzen R7 and R5 parts, but will also introduce the first R3 parts for the budget market. RX Vega will be introduced next week at Siggraph. Threadripper will be released to the wild as well as the x399 chipset. EPYC is already shipping and they expect that product to grow steadily. Ryzen Pro and then the mobile APUs will follow up later in the 2nd half of the year. Semi-custom will get a boost when Microsoft starts shipping Xbox One X consoles.

What a change a year makes. Lisa Su and the gang have seemingly turned the boat around with a lot of smart moves, a lot of smart people, and a lot of effort. They are not exactly at Easy Street yet, but they are moving in the right direction. Ryzen has been a success with press and consumers and sets them on a level plane with Intel in overall performance and power. The RX series continues to be popular and selling well (especially with miners). AMD still has not caught up with demand for those parts, but I get the impression that they are being fairly conservative there by not flooding the market with RX chips in case coin mining bottoms out again. The demand there is at least making miners and retailers happy, though could be causing some hard feelings among AMD enthusiasts who just want a gaming card at a reasonable price.

AMD continues to move forward and has recorded an impressive quarter. Next quarter, if it falls in line with expectations, should help return AMD to profitability with some real momentum moving forward in selling product to multiple markets where it has not been a power for quite some time. The company has been able to tread water for the past few years, but has planned far enough ahead to actually release competitive products at good prices to regain marketshare and achieve profitability again. 2017 has been a good year for AMD, and it looks to continue to Q3 and Q4.

It is most definitely quarterly reports time for our favorite tech firms. NVIDIA’s is unique with their fiscal vs. calendar year as compared to how AMD and Intel report. This has to do when NVIDIA had their first public offering and set the fiscal quarters ahead quite a few months from the actual calendar. So when NVIDIA announces Q4 2017, it is actually reflecting the Q4 period in 2016. Clear as mud?

Semantics aside, NVIDIA had a record quarter. Gross revenue was an impressive $2.173 billion US. This is up slightly more than $700 million from the previous Q4. NVIDIA has shown amazing growth during this time attributed to several factors. Net income (GAAP) is at $655 million. This again is a tremendous amount of profit for a company that came in just over $2 billion in revenue. We can compare this to AMD’s results two weeks ago that hit $1.11 billion in revenue and a loss of $51 million for the quarter. Consider that AMD provides CPUs, chipsets, and GPUs to the market and is the #2 x86 manufacturer in the world.

The yearly results were just as impressive. FY 2017 featured record revenue and net income. Revenue was $6.91 billion as compare to FY 2016 at $5 billion. Net income for the year was $1.666 billion with comparison to $614 million for FY 2016. The growth for the entire year is astounding, and certainly the company had not seen an expansion like this since the early 2000s.

The core strength of the company continues to be gaming. Gaming GPUs and products provided $1.348 billion in revenue by themselves. Since the manufacturing industry was unable to provide a usable 20 nm planar product for large, complex ASICs companies such as NVIDIA and AMD were forced to innovate in design to create new products with greater feature sets and performance, all the while still using the same 28 nm process as previous products. Typically process shrinks accounted for the majority of improvements (more transistors packed into a smaller area with corresponding switching speed increases). Many users kept cards that were several years old due to there not being a huge impetus to upgrade. With the arrival of the 14 nm and 16 nm processes from Samsung and TSMC respectively, users suddenly had a very significant reason to upgrade. NVIDIA was able to address the entire market from high to low with their latest GTX 10x0 series of products. AMD on the other hand only had new products that hit the midrange and budget markets.

The next biggest area for NVIDIA is that of the datacenter. This has seen tremendous growth as compared to the other markets (except of course gaming) that NVIDIA covers. It has gone from around $97 million in Q4 2016 up to $296 million this last quarter. Tripling revenue in any one area is rare. Gaming “only” about doubled during this same time period. Deep learning and AI are two areas that required this type of compute power and NVIDIA was able to deliver a comprehensive software stack, as well as strategic partnerships that provided turnkey solutions for end users.

After datacenter we still have the visualization market based on the Quadro products. This area has not seen the dramatic growth as other aspects of the company, but it remains a solid foundation and a good money maker for the firm. The Quadro products continue to be improved upon and software support grows.

One area that promises to really explode in the next three to four years is the automotive sector. The Drive PX2 system is being integrated into a variety of cars and NVIDIA is focused on providing a solid and feature packed solution for manufacturers. Auto-pilot and “co-pilot” modes will become more and more important in upcoming models and should reach wide availability by 2020, if not a little sooner. NVIDIA is working with some of the biggest names in the industry from both automakers and parts suppliers. BMW should release a fully automated driving system later this year with their i8 series. Audi also has higher end cars in the works that will utilize NVIDIA hardware and fully automated operation. If NVIDIA continues to expand here, eventually it could become as significant a source of income as gaming is today.

There was one bit of bad news from the company. Their OEM & IP division has seen several drops over the past several quarters. NVIDIA announced that the IP licensing to Intel would be discontinued this quarter and would not be renewed. We know that AMD has entered into an agreement with Intel to provide graphics IP to the company in future parts and to cover Intel in potential licensing litigation. This was a fair amount of money per quarter for NVIDIA, but their other divisions more than made up for the loss of this particular income.

NVIDIA certainly seems to be hitting on all cylinders and is growing into markets that previously were unavailable as of five to ten years ago. They are spreading out their financial base so as to avoid boom and bust cycles of any one industry. Next quarter NVIDIA expects revenue to be down seasonally into the $1.9 billion range. Even though that number is down, it would still represent the 3rd highest quarterly revenue.

Fighting for Relevance

AMD is still kicking. While the results of this past year have been forgettable, they have overcome some significant hurdles and look like they are improving their position in terms of cutting costs while extracting as much revenue as possible. There were plenty of ups and downs for this past quarter, but when compared to the rest of 2015 there were some solid steps forward here.

The company reported revenues of $958 million, which is down from $1.06 billion last quarter. The company also recorded a $103 million loss, but that is down significantly from the $197 million loss the quarter before. Q3 did have a $65 million write-down due to unsold inventory. Though the company made far less in revenues, they also shored up their losses. The company is still bleeding, but they still have plenty of cash on hand for the next several quarters to survive. When we talk about non-GAAP figures, AMD reports a $79 million loss for this past quarter.

For the entire year AMD recorded $3.99 billion in revenue with a net loss of $660 million. This is down from FY 2014 revenues of $5.51 billion and a net loss of $403 million. AMD certainly is trending downwards year over year, but they are hoping to reverse that come 2H 2016.

Graphics continues to be solid for AMD as they increased their sales from last quarter, but are down year on year. Holiday sales were brisk, but with only the high end Fury series being a new card during this season, the impact of that particular part was not as great as compared to the company having a new mid-range series like the newly introduced R9 380X. The second half of 2016 will see the introduction of the Polaris based GPUs for both mobile and desktop applications. Until then, AMD will continue to provide the current 28 nm lineup of GPUs to the market. At this point we are under the assumption that AMD and NVIDIA are looking at the same timeframe for introducing their next generation parts due to process technology advances. AMD already has working samples on Samsung’s/GLOBALFOUNDRIES 14nm LPP (low power plus) that they showed off at CES 2016.

Yesterday Intel released their latest quarterly numbers, and they were pretty spectacular. Some serious milestones were reached last quarter, much to the dismay of Intel’s competitors. Not everything is good with the results, but the overall quarter was a record one for Intel. The company reported revenues of $14.55 billion dollars with a net income of $3.31 billion. This is the highest revenue for a quarter in the history of Intel. This also is the first quarter in which Intel has shipped 100 million processors.

The death of the PC has obviously been overstated as the PC group had revenue of around $9 billion. The Data Center group also had a very strong quarter with revenues in the $3.7 billion range. These two groups lean heavily on Intel’s 22 nm TriGate process, which is still industry leading. The latest Haswell based processors are around 10% of shipping units so far. The ramp up for these products has been pretty impressive. Intel’s newest group, the Internet of Things, has revenues that shrank by around 2% quarter over quarter, but it has grown by around 14% year over year.

Not all news is good news though. Intel is trying desperately to get into the tablet and handheld markets, and so far has had little traction. The group reported revenues in the $1 million range. Unfortunately, that $1 million is offset by about $1 billion in losses. This year has seen an overall loss for mobile in the $3 billion range. While Intel arguably has the best and most efficient process for mobile processors, it is having a hard time breaking into this ARM dominated area. There are many factors involved here. First off there are more than a handful of strong competitors working directly against Intel to keep them out of the market. Secondly x86 processors do not have the software library or support that ARM has in this very dynamic and fast growing section. We also must consider that while Intel has the best overall process, x86 processors are really only now achieving parity in power/performance ratios. Intel still is considered a newcomer in this market with their 3D graphics support.

Intel is quite happy to take this loss as long as they can achieve some kind of foothold in this market. Mobile is the future, and while there will always be the need for a PC (who does heavy duty photo editing, video editing, and immersive gaming on a mobile platform?) the mobile market will be driving revenues from here on out. Intel absolutely needs to have a presence here if they wish to be a leader at driving technologies in this very important market. Intel is essentially giving away their chips to get into phones and tablets, and eventually this will pave the way towards a greater adoption. There are still hurdles involved, especially on the software side, but Intel is working hard with developers and Google to make sure support is there. Intel is likely bracing themselves for a new generation of 20 nm and 16 nm FinFET ARM based products that will start showing up in the next nine months. The past several years has seen Intel push mobile up to high priority in terms of process technology. Previously these low power, low cost parts were relegated to an N+1 process technology from Intel, but with the strong competition from ARM licensees and pure-play foundries Intel can no longer afford that. We will likely see 14 nm mobile parts from Intel sooner as opposed to later.

Intel has certainly shored up a lot of their weaknesses over the past few years. Their integrated 3D/GPU support has improved in leaps and bounds over the years, their IPC and power consumption with CPUs is certainly industry leading, and they continue to pound out impressive quarterly reports. Intel is certainly firing on all cylinders at this time and the rest of the industry is struggling to keep up. It will be interesting to see if Intel will keep up with this pace, and it will be imperative for the company to continue to push into mobile markets. I have never counted Intel out as they have a strong workforce, a solid engineering culture, and some really amazingly smart people (except Francois… he is just slightly above average- he is a GT-R aficionado after all).

Next quarter appears to be more of the same. Intel is expecting revenue in the $14.7 billion, plus or minus $500 million. This continues along with the strong sales of PC and server parts for Intel that helps buoy them to these impressive results. Net income and margins again look to appear similar to what this past quarter brought to the table. We will see the introduction of the latest 14 nm Broadwell processors, which is an important step for Intel. 14 nm development and production has taken longer than people expected, and Intel has had to lean on their very mature 22 nm process longer than they wanted to. This has allowed a few extra quarters for the pure-play foundries to try to catch up. Samsung, TSMC, and GLOBALFOUNDRIES are all producing 20 nm products with a fast transition to 16/14 nm FinFET by early next year. This is not to say that these 16/14nm FinFET products will be on par with Intel’s 14 nm process, but it at least gets them closer. In the near term though, these changes will have very little effect on Intel and their product offerings over the next nine months.

It wouldn’t be February if we didn’t hear the Q4 FY14 earnings from NVIDIA! NVIDIA does have a slightly odd way of expressing their quarters, but in the end it is all semantics. They are not in fact living in the future, but I bet their product managers wish they could peer into the actual Q4 2014. No, the whole FY14 thing relates back to when they made their IPO and how they started reporting. To us mere mortals, Q4 FY14 actually represents Q4 2013. Clear as mud? Lord love the Securities and Exchange Commission and their rules.

The past quarter was a pretty good one for NVIDIA. They came away with $1.144 billion in gross revenue and had a GAAP net income of $147 million. This beat the Street’s estimate by a pretty large margin. As a response, trading of NVIDIA’s stock has gone up in after hours. This has certainly been a trying year for NVIDIA and the PC market in general, but they seem to have come out on top.

NVIDIA beat estimates primarily on the strength of the PC graphics division. Many were focusing on the apparent decline of the PC market and assumed that NVIDIA would be dragged down by lower shipments. On the contrary, it seems as though the gaming market and add-in sales on the PC helped to solidify NVIDIA’s quarter. We can look at a number of factors that likely contributed to this uptick for NVIDIA.

Q4-2012 In a Nutshell

Tis the reporting season. Yes, that time of year when some of the major players in the computing world get together and tell us all how well they did this past quarter. Ok, so they do not necessarily get together to announce results, but they sure time them that way. Today was AMD’s turn (and Apple’s), and the results were not nearly as positive as what Intel had to offer a few days ago.

Q4 2011 was flat in terms of revenue as compared to Q3. The company had gross revenue of $1.69 billion and had a net income loss of $177 million. That net income is not necessarily a bad result, but more on that later. Margins rose to 46%, which is still a far cry from Intel’s 65% for the past quarter. Gross revenue was up 2% from last year, which considering the marketplace and Intel’s dominance, is a solid win for AMD.

When we start talking about non-GAAP results, AMD had a net income of $138 million. The difference between those two numbers (a loss vs. a nice profit) is that the loss came from one time writeoffs. AMD has lowered its stake in GLOBALFOUNDRIES to 8.8%, and in so doing incurred a hefty charge. This is not so much money lost as it is lost value in the company.

Late last week NVIDIA reported their Q3 2012 (they have an unconventional reporting calendar), and the results were overwhelmingly positive for the once struggling company. Throughout 2010 NVIDIA struggled with the poor results of their 400 series of graphics cards as compared to the relative smooth sailing that AMD had going into the DirectX 11 marketplace. NVIDIA was also struggling to get the original Tegra to be accepted by the marketplace, which never occurred with that particular generation of products.

NVIDIA reported gross revenues of $1.07 billion for the previous quarter, with a net income (GAAP) of $178.3 million. Margins improved to a respectable 52.5%, which is generally considered high for a fabless semiconductor company. When we compare these results to AMD which had reported earnings a few weeks ago, we see that while NVIDIA had less revenue (AMD reported $1.7 billion) the company had nearly double the overall profit (AMD reported around $97 million). AMD has a strong CPU business, which is something that NVIDIA is working on. AMD reported margins in the 45% range, but they also have a larger workforce and larger capital expenditures at this time.